TAIPEI (Reuters) - Singapore's sovereign wealth fund GIC sold Taiwan stocks last week, cashing in on the island's booming bourse, three sources with direct knowledge of the situation told Reuters.
Taiwan's benchmark stock index is up around 8% so far this year, buoyed by the island's surging economy which has benefited from global demand for its technology goods during the pandemic that has forced millions to work and study from home.
Last year the index rose almost 23%, outperforming a 16% rise for Japan and nearly 14% gain for China, Taiwan's largest trading partner.
On Friday, the index closed down more than 3%, as foreign investors sold T$222.7 billion (US$8.01 billion) in Taiwan stocks while purchasing T$128.3 billion, a net difference of T$94.4 billion.
The sources, who spoke on condition of anonymity as they were not authorised to speak to the media, said GIC was involved in those sales, though did not say exactly how much they sold.
"This is part of our regular rebalancing activities. We continue to have strong confidence in our investments in the Taiwan market," a GIC spokeswoman said in an email to Reuters.
One source said that sovereign wealth funds have been viewing Taiwan stocks like an "ATM" during the COVID-19 pandemic due to their strong performance backed by the island's sound economic fundamentals.
Taiwan's central bank, which regulates the foreign currency activities of overseas players in the island's financial markets, did not respond to a request for comment.
Despite a lack of formal diplomatic relations with the Chinese-claimed island, Singapore and Taiwan have close ties.
Foreign investors account for about a third of all stock trading in Taiwan.
Taiwan's government last month revised up its outlook for 2021, predicting the economy will grow at its fastest pace in seven years, seeing gross domestic product (GDP) expanding 4.64% on a boom in exports driven by tech demand.
(Reporting by Liang-sa Loh; Additional reporting by Anshuman Daga in Singapore; Writing by Ben Blanchard; Editing by Christopher Cushing and Jason Neely)